Welfare Chief: New Federal Law Could Soak City

October 12, 2006

For those who remember city council welfare hearings under the Giuliani administration—Rudy’s welfare czar Jason Turner storming off in outrage at the line of questioning, councilmember Stephen DiBrienza brandishing subpoenas to get him back in the room—this morning’s hearing was disappointingly lacking in either sturm or drang. The sparsely attended affair (three councilmembers, perhaps 50 spectators) mostly featured Bill de Blasio, DiBrienza’s current-day counterpart atop the council’s General Services Committee, politely questioning Human Resources Administration commissioner Verna Eggleston about the new federal welfare rules that went into effect this month.

If the setup was unpromising, though, the punchline was worth waiting for. The feds, noted Eggleston, have effectively screwed over New York by redefining allowable “work activities” to exclude lots of things that the city and state has been letting people do while collecting welfare benefits: no more counting substance abuse treatment programs that last more than six weeks, for example, or caring for sick relatives. Nonetheless, she detailed how she plans to work on getting the city’s “participation rate” (the percentage of those receiving benefits who are following the federal requirements) up to the required 50 percent—if, that is, items like “reducing administrative ineffectiveness” and “doing good old-fashioned strategic case management” count as details. (The official city participation rate, she testified, currently stands 44 percent, though it was unclear whether that number had been recalibrated to take into account the new, stricter definitions of who counts as “participating.”)

In the end, though, Eggleston admitted that the effort was still likely to fall short: “We as a city are going to have to be prepared to calculate from a fiscal perspective what level of sanction are we willing to take.”

In Eggleston-to-English, that translates as: New York is looking at fines for noncompliance, and they could be whoppers. If the state fails to toe the new federal line, HRA staffers testified, the city could in a worst-case scenario see its federal funding cut by as much as $375 million a year—causing de Blasio to deadpan, “When you add all these pieces together, that’s real money.”

What followed was a bizarre back-and-forth between de Blasio and Eggleston in which the committee chair tried to induce the welfare chief to explain what losing $375 million in federal cash would mean to the city’s poor—at one point, de Blasio asked Eggleston, “Have you seen Jerry McGuire? You know the line ‘Help me help you’?”—while Eggleston, not willing to let the three reporters in attendance lure her into saying something quotable, responded by reassuring the council that “I don’t believe that the client has to bear the brunt of our inefficiencies.”

For anyone who might be tempted to think that fixing welfare policy is just a matter of reducing “inefficiencies,” Joel Berg of the New York City Coalition Against Hunger was there to splash cold water on the notion. Following Eggleston’s nearly two-hour marathon on the witness stand, Berg took the mic to point out that only 23 percent of city residents who’ve ditched welfare have done so because they’ve found work—and one-quarter of those were no longer employed six months later.

“Judging the success of welfare reform solely by how many people left the rolls is like judging the success of a hospital solely by how many people left,” said Berg. “You never hear a public official say: ‘Well, fewer people are getting social security, great!'”